Quantity surveying & Costing (CE-503 (C)) - Unit 4 Short Notes

UNIT 4: QUANTITY SURVEYING & COSTING - EXAM-FOCUS SHORT NOTES

A. FUNDAMENTALS OF ESTIMATION & COSTING

Purpose and Importance of Estimation

• Purpose: To ascertain the probable cost of a proposed construction project before commencement. It is the basis for financial planning, budgeting, and sanctioning funds.

• Importance:

  • Determines feasibility and financial viability.

  • Helps in choosing the most economical design and materials.

  • Required for obtaining loans, tenders, and contract agreements.

  • Serves as a control mechanism during execution (cost control).

Principles of Units and Measurements

• Linear Measurement (m, cm): For length, breadth, depth (e.g., walls, pipes, conduits).

• Area Measurement (sq. m): For surface items (e.g., plastering, flooring, painting). Deductions for openings are made as per IS codes.

• Volume Measurement (cu. m): For 3D items (e.g., earthwork, concrete, brickwork).

• Number/Item: For countable items (e.g., doors, windows, fittings).

• Weight Measurement (tonne, kg): For steel, iron items.

• Running Meter (rm): For items like G.I. pipes, wires.

Key Differentiations

[!TIP] Exam Focus: Be ready to explain Revised vs. Supplementary with examples (e.g., Revised: change in plinth area; Supplementary: adding a new room).

B. TYPES & PREPARATION OF ESTIMATES

1. Preliminary / Approximate Estimates

• Plinth Area Estimate:

  • Method: Total Cost = Plinth Area (sq. m) × Plinth Area Rate (Rs./sq. m)

  • Plinth Area Rate derived from similar existing buildings (cost/sq. m).

  • Ancillary Charges added as % of structured cost (cost of main building):

    • Water supply & Sanitary: 5-8%

    • Electrification: 5-8%

    • Contingencies: 3-5%

    • Supervision: 2-3%

• Cubical Content Estimate:

  • Method: Total Cost = Cubical Content (cu. m) × Cubic Content Rate (Rs./cu. m)

  • Cubical Content = Plinth Area × Height of all floors.

  • Used for multi-storeyed buildings.

2. Detailed Estimates (Quantitative & Qualitative)

• Data Required:

  1. Detailed drawings (plan, elevation, section).

  2. Detailed specifications (IS codes, material grades, workmanship).

  3. Schedule of Rates (SOR) or current market rates.

  4. Standard measurement rules (IS 1200 series).

• Procedure (Step-by-Step):

  1. Takeoff: Count/measure quantities from drawings for each item.

  2. Abstract: Enter quantities in abstract sheet (column-wise: item, no., length, breadth, depth, quantity, rate, amount).

  3. Calculate Amount: Amount = Quantity × Rate.

  4. Total Up: Sum all amounts to get total project cost.

  5. Add Ancillary Charges: Contingencies, supervision, etc. on total.

• Factors to be Considered:

  • Site conditions (soil, access, water table).

  • Material availability & transportation.

  • Labor skill & local rates.

  • Construction methodology & sequence.

  • Waste & wastage factors.

  • Time period (inflation).

• Detailed Quantity Statements (Key Items):

  • Earthwork in Excavation: Measured in cu. m. Net quantity after deducting volume of regular columns/pedestals (usually 0.1 cu. m per sq. m plinth area).

  • Brickwork: Measured in cu. m. Mortar ratio matters (1:4, 1:6). Deduct volume of openings (doors, windows) and embedded items (pipes < 0.1 sq. m area).

  • Plastering: Measured in sq. m. Deductions: For openings > 0.5 sq. m, deduct 100% area; for < 0.5 sq. m, no deduction. For lintels/beams, deduct only if width > 10 cm.

3. Specialized Estimates (High Priority)

• Rough Estimate for Commercial Complex:

  • Step 1: Calculate Cubical Content = Plinth Area × Total Height (G+2 = 3 floors × 3.5m).

  • Step 2: Structured Cost = Cubical Content × Rate (Rs. 1000/cu. m).

  • Step 3: Add Ancillary Charges on Structured Cost:

    • Water supply & Sanitary: 8%

    • Electrification: 6%

    • Fluctuation of rates: 5%

    • Contractor's profit: 10%

    • Petty supervision & contingencies: 3%

  • Step 4: Total Project Cost = Structured Cost + Sum(Ancillary Charges).

• Cost Estimates for Drainage & Electrification:

  • Drainage: Based on length of pipes, number of manholes/inspection chambers, earthwork, backfilling. Rates per meter or per item.

  • Electrification: Based on number of points (light, fan, socket), length of conduits/wiring, number of distribution boards, switchgear. Often estimated as a percentage of building cost (5-8%).

• Culvert Construction:

  • Methods: Pre-cast R.C.C. slabs/beams, cast-in-situ, pipe culverts (R.C.C., Hume pipes).

  • Estimation Items: Earthwork, foundation, bed concrete, wing walls, abutments, superstructure (slab/pipe), approach slabs, parapets. Quantities based on design dimensions.

C. ESTIMATING METHODS & TECHNIQUES

1. Building Estimation: Long Wall & Short Wall Method

• Theory: For rectangular buildings with parallel walls. Long walls run along the length of the building; short walls run along the breadth.

• Procedure:

  • Long Wall Length: Out-to-Out length of building + (½ × width of wall × 2) for each successive footing.

  • Short Wall Length: In-to-In length of building - (½ × width of wall × 2) for each successive footing.

  • Length changes with depth due to offset in foundations.

• Example: For a 10m x 6m room with 30cm thick walls:

  • Long Wall (at plinth level): 10.00 + (0.30) = 10.30 m (O-O + one thickness).

  • Short Wall (at plinth level): 6.00 - (0.30) = 5.70 m (I-I - one thickness).

• Center Line Method: (Brief) Total center line length × breadth × depth. Simpler but less accurate for foundations with different offsets.

2. Earthwork Estimation for Roads

• Mid-Sectional Area Method:

  • Use: For uniform cross-section and gradient.

  • Formula:

$$V = A \times L$$

    Where, $V$ = Volume (cu. m), $A$ = Cross-sectional area at mid-point (cu. m), $L$ = Length (m).

*   **Area (A):** For embankment with side slope `m:1`:

$$A = (B + mD) \times D$$

    Where, $B$ = formation width (top), $D$ = mean depth.

• Mean Sectional Area Method:

  • Use: For roads with changing levels/gradients (most common).

  • Procedure:

    1. Calculate cross-sectional areas ($$\displaystyle A_1, A_2 $$) at two chainages (e.g., 0m and 100m).

    2. Find Mean Area: $$\displaystyle A_m = \frac{A_1 + A_2}{2} $$

    3. Volume between chainages: $$\displaystyle V = A_m \times L $$ (where $L$ = distance between chainages).

  • Numerical Steps:

    • Find formation level at each chainage using gradient.

    • Find depth of cutting/embankment = Formation Level - Ground Level.

    • Compute area for each section using $$\displaystyle A = (B + mD) \times D $$ (for embankment) or $$\displaystyle A = (B + mD) \times D $$ (for cutting, with negative D).

    • Apply mean area formula.

3. Material Statement & Rate Analysis

• Material Quantities for R.C.C. (1:2:4 M20):

  • For 1 cu. m of concrete:

    • Cement = (1 / (1+2+4)) × 1.54 (dry volume factor) = 0.154 cu. m ≈ 4.4 bags (since 1 bag = 0.035 cu. m).

    • Sand = (2 / 7) × 1.54 = 0.44 cu. m.

    • Aggregate = (4 / 7) × 1.54 = 0.88 cu. m.

  • For 25 cu. m: Multiply each by 25.

  • Note: 1.54 is the dry volume factor (1.57 for 1:1.5:3, 1.52 for 1:3:6).

• Rate Analysis:

  • Definition: Systematic determination of rate per unit of work, breaking down all cost components.

  • Purpose: To fix fair rates for items in BOQ, estimate cost, and control expenses.

  • Factors Affecting Rate Analysis:

    1. Materials: Cost, type, source, wastage (5-10%).

    2. Labor: Skilled/unskilled, wages, productivity (task work).

    3. Equipment/Tools: Depreciation, hire charges.

    4. Overhead Charges: Site overheads (shelter, water, electricity), establishment charges.

    5. Profit: Contractor's profit (typically 10%).

    6. Location & Transport: Distance from market.

    7. Method of Construction: Manual vs. mechanized.

  • Preparation (Example: Lime Concrete 1:2:6):

    | Item | Quantity | Unit | Rate (Rs.) | Amount (Rs.) | | :--- | :--- | :--- | :--- | :--- | | Materials: | | | | | | Lime | 0.12 cu. m | cu. m | 2500 | 300 | | Surkhi | 0.24 cu. m | cu. m | 800 | 192 | | Brick Ballast 40mm | 0.72 cu. m | cu. m | 1200 | 864 | | Labor: | | | | | | Mason | 0.8 no. | day | 600 | 480 | | Mazdoor | 2.0 no. | day | 400 | 800 | | Overhead @ 5% | | | | 121.8 | | Profit @ 10% | | | | 275.8 | | Total | | | | 3033.6 | | Rate per cu. m | | | | 3033.6 |

• Task Work: Quantity of work (e.g., brickwork, plastering) a laborer can complete in a standard day (8 hours). Affects labor cost calculation. Factors: skill, material availability, weather, supervision.

D. VALUATION & FINANCIAL ASPECTS

1. Purpose & Functions of Valuation

• Purpose: To determine the market value or fair price of a property at a given date.

• Functions of a Valuer:

  • For sale/purchase, mortgage, taxation.

  • Rent fixation (standard rent).

  • Insurance (sum insured).

  • Compulsory acquisition (government).

  • Partition of property.

  • Loan security.

2. Methods of Valuation of Buildings

3. Fixation of Standard Rent

• Method: Based on Cost Method and Sinking Fund.

• Formula (Gross Rent):

$$\text{Gross Rent} = \text{Interest on (Land Cost + Construction Cost)} + \text{Sinking Fund}$$

• Standard Rent = Gross Rent - Outgoings (taxes, repairs, insurance).

• Steps:

  1. Find total cost (land + construction).

  2. Calculate annual interest at a standard rate (e.g., 7%).

  3. Calculate annual sinking fund to recover cost over useful life.

  4. Sum (2) + (3) = Gross Annual Rent.

  5. Deduct annual outgoings (~10-15% of gross rent).

  6. Divide net annual rent by 12 for monthly standard rent.

4. Sinking Fund

• Definition: A fund accumulated by setting aside a fixed sum annually (with compound interest) to replace or recover the initial investment at the end of the property's useful life.

• Importance: Ensures capital is recovered; used in rent fixation and valuation.

• Calculation (Annual Sinking Fund Coefficient):

$$S = \frac{i}{(1+i)^n - 1}$$

Where, $S$ = Sinking fund factor (per Re. 1), $i$ = interest rate on sinking fund (e.g., 4%), $n$ = useful life (years).

*   **Annual Sinking Fund Amount** = (Total Cost) × $S$.

*   **Example:** For Rs. 1,00,000 cost, 30 years life, 4% rate: $$\displaystyle S = 0.021 $$, Annual S.F. = 1,00,000 × 0.021 = Rs. 2,100.

5. Year's Purchase (Y.P.)

• Definition: The present value of a property that yields a net annual income of Re. 1 in perpetuity (or for a fixed term). It is the reciprocal of the capitalization rate.

• Numerical Calculation (for fixed life with sinking fund):

$$\text{Y.P.} = \frac{1}{i + S}$$

Where, $i$ = rate of interest on capital (e.g., 7%), $S$ = sinking fund coefficient for given life & rate.

*   **Example:** Life = 15 years, $i$ = 7%, $S$ for 15 yrs @ 4% = 0.043.

$$\text{Y.P.} = \frac{1}{0.07 + 0.043} = \frac{1}{0.113} = 8.85$$

*   **Value of Property** = Net Annual Income × Y.P.

6. Dual Rate Interest

• Concept: Used in valuation where different interest rates are applied:

  • Higher rate ($$\displaystyle i_1 $$): On the land cost (land value appreciates, no sinking fund needed).

  • Lower rate ($$\displaystyle i_2 $$): On the construction cost (building depreciates, sinking fund required for recovery).

• Gross Rent Formula:

$$\text{Gross Rent} = (\text{Land Cost} \times i_1) + [(\text{Construction Cost} \times i_2) + (\text{Construction Cost} \times S)]$$

Where $S$ is sinking fund factor for building life at rate $$\displaystyle i_2 $$.

E. ADMINISTRATIVE & CONTRACTUAL DOCUMENTS

1. Detailed Project Report (DPR)

• What: A comprehensive document submitted for project approval, covering all technical, financial, and managerial aspects.

• Content & Preparation:

  1. Executive Summary.

  2. Project Description: Location, objectives, scope.

  3. Market Analysis: Demand, supply, competition.

  4. Technical Feasibility: Site details, soil investigation, design brief, technology, construction methodology, detailed cost estimate.

  5. Financial Analysis: Project cost (detailed), means of finance (equity, debt), pro forma cash flows, projected profitability, IRR, NPV.

  6. Implementation Schedule: Bar chart/PERT.

  7. Risk Analysis & Mitigation.

  8. Social/Environmental Impact.

  9. Conclusions & Recommendations.

2. Schedule of Rates (SOR)

• Current Schedule of Rates (CSR): A document published by government/agencies (e.g., PWD, CPWD) listing standardized rates for various construction items in a specific region and time period.

• Significance: Provides benchmark rates for:

  • Preparing estimates (especially for government projects).

  • Checking/analyzing contractor's rates in tenders.

  • Valuation and arbitration.

• Components: Item description, unit, basic rate (material+labor), overheads, profit percentage, rules for deductions, lead & lift for materials.

3. Bill of Quantities (BOQ) & Abstract Sheet

• BOQ: A list of all quantified items of work (from detailed estimate) with their measured quantities, units, and unit rates. Forms part of tender document.

• Abstract Sheet: A summary sheet derived from BOQ. It groups items (e.g., earthwork, concrete, masonry) and shows:

  • Total quantity for each group.

  • Total amount for each group.

  • Grand Total (before ancillary charges).

• Purpose: Enables contractors to price the work systematically; basis for interim payments and final bill.

4. Tender Notice (Brief)

• Advertisement inviting bids for a project. Contains: project name, estimated cost, completion period, earnest money, last date for submission, address for submission, tender document cost.

5. Financial Classifications

• Overhead Charges / Overhead Costs:

  • Definition: Indirect expenses not attributable to a specific work item but necessary for overall project execution.

  • Components to Include:

    • Site Overheads: Site office rent, staff salaries, electricity, water, telephone, security, fencing.

    • Establishment Charges (Head Office): Office rent, administrative staff salaries, audit fees, legal expenses.

    • Depreciation of tools & plant.

    • Insurance (workmen, third party).

    • Taxes & Levies (not GST on materials).

• Work Charge Establishment:

  • Definition: Directly employed supervisory and clerical staff on the project site (e.g., site engineer, clerk of works, overseers). Their salaries are part of project overheads.

  • Components: Salaries of site-level non-labor staff, their allowances, site office expenses.

• Gross Income vs. Net Income:

  • Gross Income: Total revenue from contract (total bill amount).

  • Net Income: Gross Income - (Cost of works + Overheads + Taxes). Actual profit.

F. SPECIALIZED CONSTRUCTION COSTING (From Specific Questions)

Cost Percentages (Ancillary to Structured Cost)

These are ADDED to the Structured Cost (cost of main building structure) to get total project cost. Percentages vary by project type and location, but typical ranges from past papers:

[!TIP] Common Pitfall: In Rough Estimate for Commercial Complex (Jun 2025), contractor's profit was applied on structured cost (before adding other percentages). Always read the question's "provided for" clause carefully.

Key Construction Stages & Approximate Cost % (of Total Project Cost)

Factors Affecting Cost Percentages

• Building Type: Residential vs. Commercial vs. Industrial.

• Specification Quality: Premium finishes increase % for finishes/services.

• Location: Land cost % varies (high in cities).

• Height & Design Complexity: High-rise increases foundation & services %.

• Regulations & Bylaws: Mandatory requirements (e.g., fire safety, parking) affect cost distribution.

SUMMARY OF HIGH-FREQUENCY FORMULAS